AASM News Archive

Loophole could allow insurers to avoid ACA requirements through 2014

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American Academy of Sleep MedicineWednesday, April 3, 2013

Some health insurers are planning to let residents renew their current coverage to avoid new requirements under the Affordable Care Act, a move that could temporarily derail efforts to reform the insurance market, the Los Angeles Times reports.

A loophole in the law allows insurers to extend existing coverage through the end of 2014 without following the new ACA rules. The move could provide a short-term benefit for certain customers, which would shield them from potentially large premium increases, observers note that it could be detrimental to other policyholders.

Insurers could concentrate on renewing younger beneficiaries, thereby withholding them from the broader insurance pool in 2014, which could lead to higher costs for sicker and older populations in government health insurance exchanges. In addition, observers say that insurers might rush to enroll more people in individual policies before December so that they then can extend those policies through next year.